University of Chicago
Type of paper: Thesis/Dissertation Chapter
McWane, Inc. is a privately held company based in Birmingham, Ala., which owns plants across the country and Canada and who is one of the world’s largest manufacturers of cast iron sewer and water pipe (McWane Mess). From 1995-2003, McWane plants, in the U.S., had 4,600 worker injuries (CBC News). The company was also cited for more than 400 safety violations and 450 environmental violations during that same period (Barstow, Foundry). Tyler Pipe, one of McWane’s plants, was described by one its workers. He said it was “a dim, dirty, hellishly hot place where men are regularly disfigured by amputations and burns, where turnover is so high that convicts are recruited from local prisons, where some workers urinate in their pants because their bosses refuse to let them step away from the manufacturing line for even a few moments” (Barstow and Bergman, Texas). A federal investigation began in January 2003, which was the same month The New York Times published a series of articles that described McWane as one of the nation’s most persistent violators of workplace safety and environmental laws (Barstow, Foundry).
Root organizational causes and regulatory weakness factors contributed to the McWane scandal. The structure at McWane contributed to the scandal because it was one of the root organizational causes. McWane Inc. is a privately held organization where the family and a few close individuals run it. The family is described as secluded and very private (Barstow and Bergman, Family’s). Executives and family members repeatedly decline interview requests and rarely talk to the media (Barstow and Bergman, Family’s). In 2007, of McWane’s twenty-five divisions, only two included McWane in the name (Wisniewski). Even though McWane’s divisions were places where the desperate seek work (Barstow and Bergman, Texas), society did not hold the right people accountable. Many individuals do not know McWane is connected because the plant names rarely reflect their owner.
Without interviews, the fact that it is a private company, and that it keeps its name off new divisions, McWane lacks transparency to help keep it accountable. The seclusion and privacy of the family makes it seem as though they stay out of the public eye for a reason. McWane’s organizational culture was also a root cause that contributed to the scandal. One phrase was posted throughout the plants and was posted in large orange print: REDUCE MAN HOURS PER TON (Barstow and Bergman, Texas). This phrase created a culture that drove all aspects of the McWane companies. McWane was not the best place to work. In fact, there were times when turnover was 100 percent at one plant (The McWane Mess). High turnover is one measure of the culture at McWane and it shows how employees fit into that culture.
The high turnover was disturbing and not normal for the industry. Acipco, a direct industry competitor, had a yearly turnover of around half a percent (Barstow and Bergman, Family’s). The organizational culture that focused on one key phrase continued into work shifts. There were two 12-hour shifts instead of the normal three shifts of eight hours. At the end of a shift, supervisors often called for four more hours of work. Therefore, employees worked 16-hour days, sometimes seven days a week (Barstow and Bergman, Texas). Leadership was also a root organizational cause. McWane never developed a system to hold supervisors accountable for safety; however, their system for holding supervisors accountable for production downtime (Barstow and Bergman, Texas). Federal rules require conveyor belts be shut off for maintenance.
They also require that all belts have safety guards. The rules are important because they help prevent workers from being caught and crushed. In one instance, inspectors discovered that a belt violated both of those rules (Barstow and Bergman, Texas). This negligence contributed to one of the nine deaths that occurred at McWane divisions from 1995-2003 (Barstow and Bergman, Deaths). Leaders in the company gave orders that were in clear violation of laws. Another example of leadership was what to do with 200 old tires. It would have cost about $750 to have them brought to a waste dump. However, documents show that a plant manager ordered the tires be burned, even though he had been notified burning tires violated air-quality laws (Barstow and Bergman, Texas). The managers like the one above were partially victim to those higher up.
The leadership style at McWane was clearly a top down approach. One plant manager stated, “I was like a robot. All that mattered was getting machines moving again after an accident” (The McWane Mess). One risk manager says that a top down approach creates a disconnection between plant managers and executives. He also explains that this disconnection increases in privately held companies due to a lack of accountability (The McWane Mess). OSHA’s regulatory and oversight weakness contributed to the McWane scandal. At the time, the laws in place were not severe enough detour McWane from committing them.
At the time of the scandal, the crime, of willfully violating safety rules that cause the death of a worker, was a misdemeanor. That crime was a less serious than harassing a wild burro on federal lands, which was punishable by up to one year in prison (Barstow and Bergman, Deaths). The fines McWane had to pay for violations were lower than the cost of having the machines down due to implementing and following safety regulations. A McWane executive confessed that Tyler Pipe had willfully ignored workplace safety laws, a crime that caused the death of a worker.
The company only paid a $250,000 fine (The McWane Mess). OSHA let off McWane through payments and it did not do more to ensure the safety of workers in McWane plants. Weak labor union oversight also played a role in contributing to the scandal. The labor unions that represented McWane workers were usually small and overwhelmed with cases. The unions had no bargaining power because they were small, so they could not effectively protect their workers from low wages, hours per shift, or dangerous environments. A United Steelworkers union official attempted to tour Tyler Pipe with a safety and health specialist but had been rejected twice (The McWane Mess).
McWane scandal had widespread consequences. Those consequences affected the company as well as the environment and manager at the plants. The scandal produced financial woes and a tainted reputation for McWane. McWane was ordered to pay $19 million in fines and restitution in 2006 (Barstow, Foundry). In addition, McWane was ordered to pay $8 million in fines for dozens of workplace safety and environmental crimes in 2009 (Barstow, Iron Pipe). The fines that McWane had to pay were substantially more than any other fines it had previously received. The McWane scandal also greatly affected the environment. As stated before, McWane had over 450 environmental violations (Barstow, Foundry).
One of those incidents, the burnt tires, caused toxins to be released directly into the air. Another incident that McWane was charged with was illegally dumping oil into the Atlantic Ocean. McWane had dumped so much oil that it created an 8.5-mile-long slick (Barstow and Bergman, Family’s). Lastly, the McWane scandal affected the lives of those managers who were charged criminally. Four McWane plant managers were convicted or pled guilty to committing environmental crimes (United States v. Atlantic). These people took risks that ended in tarnished reputations, criminal records, jail time, and hefty fines.
Prevention is key so that scandals, like McWane, do not happen again. One preventative step is that the government has set stronger penalties for companies who repeatedly violate safety and environmental laws. The government has also set out better guidelines to prosecute repeat offenders (Barstow, Guilty Verdicts).
Another preventative measure is that OSHA is looking to increase its criminal enforcement arm. In four years, OSHA only sent 21 percent of eligible cases to the Department of Justice, and the DOJ acted on 4 percent (McGarity et al). If OSHA can increase its force, it can ensure the safety of more workers. The increased force would be a deterrent for companies, because the chances of it being charged would increase.
One last way to prevent other scandal is to have the White House and Congress step up (McGarity et al). If these two groups could work together and provide OSHA with a larger budget, OSHA could then improve everything that they do. It all comes down to the fact that OSHA is there for the people, but with a small budget, they cannot do the best job possible.
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